Pompey's creditors twist

The BBC, always one of the more reliable sources of information, are running a story claiming that creditors could be offered as much 99p in the pound, 5 times that offered by the club itself.read the story below, it is a straight lift from BBC, nothing added at all.

By John Sinnott

Portsmouth creditors have been offered potentially 99 pence in the pound - a figure far in excess of the one on the table from the administrator.

Pompey administrator Andrew Andronikou is offering a maximum 25p in the pound.

The rival offer has been put together by Insolvency experts Griffins, which represents some of Pompey's creditors.

Griffins says creditors could receive a minimum 65p in the pound, but if former owner Sacha Gaydamak drops his £32m claim against Pompey that rises to 99p.

'Those that caused or presided over the period that gave rise to this situation ought to bear much of the cost of putting it right,' says the Griffins proposal.

If and when Portsmouth emerge from a Company Voluntary Agreement (CVA) - which allows them to exit administration - the club will be run under new ownership, while the 'old club's' conduct in the run-up to administration would be investigated by a liquidator.

Griffins' proposal refers to the possibility that Gaydamak could be liable for a claim of over £50m if there was evidence he had breached his duties - for example if he was found to have allowed Portsmouth to trade while insolvent before entering administration.

'Griffins are waving a big stick at Gaydamak,' insolvency lawyer Guy Thomas of SA Law LLP told BBC Sport. 'They are saying: 'If there is a claim against Gaydamak and he acts generously now, voting for this proposal, why would any liquidator come after you?''

Andronikou's proposal, which has the premise that the club need money to return to the Premier League, lasts five years with 75% of unsecured creditors needing to support it to gain approval.

Andronikou of UHY Hacker Young, has offered 20p in the pound, rising to 25p if the club is promoted.

Griffins' proposal is based on the principle that Pompey's creditors, who have funded the struggling club over the last few years, should have the first claim to the future income generated by the club.

That future income - available to either the club or creditors - includes parachute payments that relegated clubs receive as well as television rights money and player sales.

Griffins also wants a 'clear link between the club and the money it gets from fans so that the fans can understand how they can help their club in the future.'

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In April, Portsmouth's administrators revealed that the relegated Premier League club's debts stood at £119m, up from a figure of £60m-£70m in February when the club became the first in the Premier League to enter administration.

'It's the creditors' choice how and when the club will emerge from administration, not the current administrators,' added Thomas.

'If, having considered both documents carefully, they choose Griffins' analysis over Andronikou's then they will likely reject the current administrator's CVA proposal.

'Like UHY Hacker Young - Andronikou's firm - Griffins is a professional insolvency firm. One looking to 'retain' an existing appointment and the other looking to gain new ones. They say competition is a good thing, hopefully this one will end up benefiting the creditors.'

The creditors are due to meet on 17 June to vote on the CVA with Portsmouth needing the support of 75% of creditors to have it approved.

Failure to secure a CVA could result in the club incurring future points deductions in the Football League.

The BBC understands that Her Majesty's Revenue and Customs, who say they are owed £35m by Portsmouth, will vote against Andronikou's proposal to take Pompey out of administration, arguing that the amount does not offer a suitable return for taxpayers.

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Hmrc have not proved anything other than they are owed £17m, that's not enough on it's own to stop a CVA. The option of 20-25p is based on agreement now; against nothing now and an expensive risky court case with the slim poss ibility of more from Gaydamak; don't see small creditors going for it. Their other risk is that they go for the mythical 99p Pompey don't exit administration , get points deduction, get relegated and the Admin 20-25p offer would certainly get revised --down. Small creditors need financial certainty, and they are mostly local; they don't want to kill the club or risk getting nothing; not convinced about this one.

The admin offer and suggestion rings so much better. It even leaves the possibility of a thorough investigation into the running of the club over the last few years.
To me that seems the honourable way forward. But as a scummer what do I know?

I suppose this new deal is just haggling, but its more worry about whether the CVA will get agreed at all, and if not, not only will there be a points deduction, but what happens to the club? As for the article, it's always been said that the HRMC won't approve a CVA, that's their policy. I'm glad their challenging the creditors rule though, which is utter madness.

This is very worrying. There is no doubt that those who allowed to let the club run while insolvent should be punished but is this the right solution? Is as SFC says the UHY route of having a thorough investigation not the better choice? Whatever the creditors deserve the best deal an they will no doubt opt for the Griffin alternative. Sacha wont be happy.

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